The start of the New Year usually means people make resolutions. These resolutions often range from personal achievements to financial goals. However, most often than not, these resolutions fall apart by mid-year. However, if one of your goals happens to be a financial goal related to paying back debt or building a savings by renting out room, I can perhaps get you started on the right foot to ensure that you hold true to you resolution.

Are You Ready? Good!

Let’s Get Started!

Definition

Have a goal set in your mind.

Decide why you want to rent out your spare bedroom or what you plan to do with the rental income before you find you start collecting rent. This is important. If you don’t set a goal, you’ll most likely end up spending on something else besides what you originally intended for. Think back when you were a kid and you parent’s gave you lunch money, how many times, did you actually use it for lunch versus buying candy or other junk food on the way to school. Then when it actually came time for lunch, you didn’t have any money to buy lunch and you’re feeling hungry looking at other kids eating their lunch. You get my point? This is why it’s important to set a goal.

Now, take a moment and think of goal.

Is it to pay back credit card debt? Take action right now and write down how much you owe and see how much you actually need to pay it back figuring interest.

Want to build an emergency fund? Emergency funds are good to help survive an economic down turn. Think about what your monthly expenses per month are and decide how many months worth of living expenses you want to save up. Imagine what an extra $400-$600 a month can do for your emergency fund.

What ever your goal is, Write it down or track it in a spreadsheet! If you’re like me, once in awhile, I’ll have a great idea, but then I forget it. So if you write it down, you won’t forget it and it will help you to maintain focus.

Time is Running Out

After you have your goals defined, set a deadline for your particular goal. What good is having a goal without a defined timeline for actually accomplishing your goal.

Remember when you were in school and you had a paper due on Monday morning, despite putting off until Sunday night, the paper somehow magically was finished by the deadline, Monday morning. It’s because if it wasn’t for the last minute, nothing would get done. This is precisely why it’s important not only to set a goal, but also a time line.

For example, one of my goals is to have my second mortgage paid off by 2012. So far, I’m looking to hold true to that goal I set back a year and half ago. If I’m going to fall short, I’m going to try

Baby Steps

Now once you have a goal written on paper, put it somewhere, where you’ll see it everyday. This is important especially when you’re renting out a room. I’ll explain this in a later post, but for now think of how you’re going to feel with another person living in your dwelling. If you never lived with a roommate or don’t like living with other people, renting out a room maybe a little bit of a challenge.

So if you’re in this situation, you’re going to have to decide whether it’s worth it for you to take on a roommate to achieve you financial goal. That’s as black and white as I can put it. It’s going to take some work.

I originally intended only to have roommates until I graduated from grad school, but since the roommate gig was working well for me, I decided to continue to rent out my rooms to pay off my mortgage debt. So if you’re apprehensive, give it a try.

Take Away

Define a financial goal you want to achieve with the rental income. Don’t look for roommates until you have this set.

Decide whether you can handle living with a roommate until your financial goal is met.